Collective agreements and retirement clauses are evolving against the grain of Social Security regulations with a spectacular increase in retirement premiums before age 65. These clauses, which serve as a tool for restructuring or renewal of the workforce through economic rewards or bonuses, have multiplied to reach more than 700,000 workers under a collective agreement in force out of five, according to data from the Ministry of Labor and the Economy.
This figure is 85% higher than that recorded during the pandemicwhile there were 378,000 employees covered by this clause. This increase reflects a trend in the field of work that also provides for retirement and is part of the progressive aging of the working population. “The application of retirement incentives in Spain shows a growing trend, both at the state level and in the area of collective agreements,” said Alberto Novoa, member of the Board of Directors of Labor Lawyers (ASNALA) , during an interview with elEconomista.es.
While the government has further penalized early exits from the labor market by reforming the public pension system, collective bargaining has taken another route: that of compensation, or one-off or periodic payments for those who opt for an exit. premature in order to compensate for certain pension reductions which can exceed 20% for those who leave more than months in advance.
Collective bargaining is made up of the most representative unions of each sector or autonomous community, which agree with employers and companies on fundamental aspects such as the improvement of wages, the length of the working day and all aspects related to employment, contracts, training or security. at work, among other things. Last year, 1,773 agreements were signed and registered which affected more than 4.4 million workers, according to annual statistics from the Ministry of Labor and Social Economy with data recorded until June 2024.
There is a specific section which details the clauses which have an effect on retirement, understood as a due to the termination of the contract which does not always correspond to the age that many have in mind: 65 years once 38 years of contributions have been completed, or 66 years and 6 months if this condition is not met in 2024. Retirement clauses are a mechanism or instrument of employment policy to be applied in the structure of labor.
These clauses are used by companies and unions instrument for renewal or cost reduction through personnel restructuring as in its most common perception of signaling the end of the professional life of workers. As mentioned, those who reward leaving before age 65 reach just over 15% of employees covered by collective bargaining, a percentage slightly similar to that of ten years ago, when the number of workers benefiting from incentives to retirement before age 65 exceeded 811,000.
Against pension reform
The clauses provide financial incentives for the worker to retire, which occurs more intensely in the event of early retirement. This is in contradiction with the regulations applied by the Ministry of Social Securitywhich further tightened pension reductions for cases where early departure is voluntary.
Novoa, member of ASNALA and partner of RocaJunyent, highlights the loss of experience in the labor market, as well as the high cost of early retirement in the pension system of these firms due to the perverse effect of the loss of social contributions that the Administration ceases to collect.
The application of these specific clauses is not generalized, despite the large number of workers covered or the agreements that include them. “In Spain, the diversity in the application of these incentives reflects the need to adapt to the specific circumstances of each sector and company.” Other countries also apply this tool to manage the transition to retirement according to different models.
“Early and partial retirement are popular options and supplementary pensions are gaining ground”underlines Novoa. The regulations also oriented social security towards the area of collective bargaining. The best example is the recently created construction plan, which in nine months is already the largest in Spain and has been agreed by agreement in 2023.
“Collective agreements play a crucial role in implementing these incentives, particularly in sectors where jobs are physically demanding. However, the coverage and type of incentives can vary significantly depending on the sector and company,” explains the lawyer.
